EU farms look to feed growing market in China

Demand among increasing middle class can be rich harvest for agriculture sector

The European Union is looking to further boost agricultural exports to China as the country's rapidly expanding middle class increases demand for high-quality, safe products, according to top EU officials.

Phil Hogan, the European commissioner for agriculture and rural development, says exports of agriproducts to China from the EU rose 33 percent last year.

"I see enormous potential for the next 10 to 15 years for high-quality and safe products, especially for dairy and meat products," he said on the sidelines of the G20 agricultural ministers meeting in Xi'an, capital of Shaanxi province, on June 3.

Hogan says the European Commission expects to see about 50 percent growth in those areas by 2020.

"The EU is a dissembler of high-quality, safe food. We export lots of good products to China. We're also cooperating more with China in terms of new technologies, to help Chinese farmers and enterprises to develop sustainable practices to grow their own products," he says.

Exports of meat, especially pork, from the EU to China have also increased substantially over the past few months, and Hogan says the trend is expected to continue.

The EU scrapped milk quotas in April last year after more than three decades of efforts to prevent overproduction. The system, set up in 1984, is ending so that EU dairy businesses can compete with international rivals in supplying fast-growing markets in Asia and Africa, the BBC reported.

However, Hogan says the move comes as other milk producers, including in the United States, New Zealand and Australia, have also increased production.

"We're now faced with a saturated world market, and the EU is forced to take measures to freeze and reduce the production in the short term," he says, adding that the saturation has made it even more urgent for the EU dairy producers to further explore markets in the Far East, especially China.

He dismissed the possibility of the milk quota being reintroduced by the EU, as there are now measures to better manage supply and demand.

Hogan says that with such a big population in China, and with strong innovative agriculture in the EU, the two parties can work closely together to implement the best agricultural models and programs for each other.

He adds that the EU and China can also cooperate on precision agriculture and other ideas to grow more food in a more sustainable way.

However, Franz-Georg von Busse, chairman of the German Agribusiness Alliance, who was also at the G20 meeting, says there is still an imbalance between investment from Europe to China and China to Europe, including in the agricultural sector.

"Germany's investment in China amounted to 60 billion euros ($68.1 billion), while China's investment in Germany was only 2 billion euros," he explains. "Everybody should work together to balance this."

He also warns Chinese companies that investment in the agricultural sector is not only about money, but also about people understanding each other and learning about the culture in another country.

In January, negotiators from the EU and China reached consensus on an ambitious investment agreement and moved on to specific text-based discussions, a major step in talks launched at the end of 2013 and a direct response to the political commitments made by both sides at an EU-China summit in June last year.

Hogan says the completion of the investment agreement will help further spur agricultural investment in both directions.

In one of the most high-profile cases recently, China National Chemical Corp has offered more than $43 billion to buy Swiss agrochemical and seeds producer Syngenta AG, which would be the biggest overseas acquisition by a Chinese company.

xuwei@chinadaily.com.cn